Clara Furse, the chief executive of the London Stock Exchange, has forecast the abolition of stamp duty on share deals, a tax against which the City and the LSE have waged a long campaign.

Members of the LSE board of directors are convinced that there is a significant move on policy by the Conservatives and hope for a similar shift at the Treasury. As a result, Ms Furse forecast at the presentation of the LSE’s full-year figures that “it must now be a question of when, and not if, this tax is scrapped”.

The City is convinced that stamp duty, which in 2005-06 brought £3 billion to the Treasury, is a significant drag on the London market’s performance.

A recent report commissioned from the independent consultant Oxera claimed that abolition would be broadly revenue-neutral. However, Gordon Brown, the Chancellor, has shown no signs of moving towards this.

The Conservatives have been more positive. George Osborne, the Shadow Chancellor, said last week that there was “a powerful case” for abolishing or reducing the tax. However, he has so far refused to make a firm pledge to do so.

Ms Furse said: “The shift is coming from the Conservatives, who have shown leadership on this.” Chris Gibson-Smith, the LSE chairman, when asked whether a similar shift had been detected at the Treasury, with which the LSE and the City of London Corporation are in dialogue about the tax, said: “It’s too soon to say.”

The LSE staged another strong performance in the financial year to March 31. However, some observers have questioned, given the huge growth in revenues that the LSE has enjoyed over the past couple of years and the high-bonus culture in the City, whether there is the political will for a measure that could be seen as giving even higher profits to Square Mile workers.

The last financial year saw LSE revenues rise by 20 per cent to £349.6 million, powered by a strong performance from broker services. An explosion in trade, especially on the Sets electronic trading platform, sent revenues there ahead by 31 per cent to £163.8 million.

The exchange, and other world markets, have benefited from increasing business from hedge funds and the growth in semi-automatic “black box” trading conducted at split-second speeds by computers.

Next month the LSE rolls out its new TradElect platform. This will increase London’s capacity fivefold to cope with expected further growth in volumes.

Operating profits last year, before exceptional items, were up 55 per cent at £185.6 million. In line with commitments made in December, at the time of the hostile takeover bid from Nasdaq, the New York exchange, a final dividend of 12p makes a total of 18p, a rise of 50 per cent.

Nasdaq is barred from bidding again for the LSE until early next year but retains a stake of slightly more than 30 per cent. Another 26 per cent is in the hands of active traders, such as hedge funds.

Dr Gibson-Smith said that there had been no recent contact with Nasdaq. “We’re open for discussions any time they want,” he said. “At the moment, they haven’t asked for any.”

LSE shares advanced by 19p to £13.11 yesterday.

Major issues

–– 503 new issues or IPOs in 2006-07, raising £29 billion, more than NYSE and Nasdaq combined
–– AIM in its own right was sixth-biggest IPO market, raising £10 billion
–– Total money raised on market up 57 per cent to £53.7 billion
–– Number of terminals up from 104,000 to a record 116,000
–– Daily order book volumes up 58 per cent

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